Correlation Between Hanjin Transportation and Polaris Office
Can any of the company-specific risk be diversified away by investing in both Hanjin Transportation and Polaris Office at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hanjin Transportation and Polaris Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanjin Transportation Co and Polaris Office Corp, you can compare the effects of market volatilities on Hanjin Transportation and Polaris Office and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hanjin Transportation with a short position of Polaris Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjin Transportation and Polaris Office.
Diversification Opportunities for Hanjin Transportation and Polaris Office
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hanjin and Polaris is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Hanjin Transportation Co and Polaris Office Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polaris Office Corp and Hanjin Transportation is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hanjin Transportation Co are associated (or correlated) with Polaris Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polaris Office Corp has no effect on the direction of Hanjin Transportation i.e., Hanjin Transportation and Polaris Office go up and down completely randomly.
Pair Corralation between Hanjin Transportation and Polaris Office
Assuming the 90 days trading horizon Hanjin Transportation is expected to generate 1.96 times less return on investment than Polaris Office. But when comparing it to its historical volatility, Hanjin Transportation Co is 4.14 times less risky than Polaris Office. It trades about 0.13 of its potential returns per unit of risk. Polaris Office Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 526,000 in Polaris Office Corp on September 22, 2024 and sell it today you would earn a total of 25,000 from holding Polaris Office Corp or generate 4.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjin Transportation Co vs. Polaris Office Corp
Performance |
| Timeline |
| Hanjin Transportation |
| Polaris Office Corp |
Hanjin Transportation and Polaris Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjin Transportation and Polaris Office
The main advantage of trading using opposite Hanjin Transportation and Polaris Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjin Transportation position performs unexpectedly, Polaris Office can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Polaris Office will offset losses from the drop in Polaris Office's long position.| Hanjin Transportation vs. Kyeryong Construction Industrial | Hanjin Transportation vs. SK Telecom Co | Hanjin Transportation vs. Sejong Telecom | Hanjin Transportation vs. Jeju Semiconductor Corp |
| Polaris Office vs. Dongsin Engineering Construction | Polaris Office vs. Doosan Fuel Cell | Polaris Office vs. Daishin Balance 1 | Polaris Office vs. Total Soft Bank |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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